How Putin Lowered the Price of Europe's Apples

Dutch farmer Bas Feijtel has a bumper crop of pears this year, but he’s going to harvest only about 75 percent of it. The rest he will let rot in the fields of his 60-acre orchard. Last year, Feijtel sold his higher-quality pears for about 50 euro cents (65¢) a kilogram, but this year he says he may get only about 15 euro cents for them, thanks to Russia’s food import ban, which went into effect in August. About 20 percent of the Dutch pear harvest typically goes to Russia. Now it makes sense for Feijtel to harvest only his very best pears; paying workers to pick the lower-grade fruit would cost more than he could sell it for. “When the problems started from Russia, there was panic,” he says. “It was a very bad moment for us, because it was one week before we started picking.”

After issuing a few sanctions aimed at some of Russian President Vladimir Putin’s inner circle this spring, on July 31 the European Union went after wider swaths of Russia’s economy, banning commerce with the financial, energy, and defense industries, which are dominated by large state-owned enterprises. One week later, Putin hit back with a one-year embargo on imports of a host of agricultural products from any country or region that had adopted sanctions against Russia. That includes the EU, Norway, the U.S., Canada, and Australia. Not surprisingly, the effects of the Russian ban are being felt first in Europe, by far the biggest trade partner with Russia among those targeted. Exports of EU food products now banned by Russia were worth €5.1 billion ($6.5 billion) last year, or 4.2 percent of the bloc’s agricultural shipments, according to the European Commission.